A couple of weeks ago I was at the Customer Relationship Marketing Conference (CRMC), in Chicago. The conferences theme was “Experiencing the Future” with a common theme of moving beyond standardized practices to deliver on personalization and relevant customer experiences.
One of the more interesting presentations, in my opinion, was given by Mike Hogan, EVP Strategic Business with GameStop, who walked us through their multi-year transformation from Loyalty Programs to Loyalty Culture. With GameStop’s members driving 71% of sales and $100MM in membership revenue, understanding and being able to affect their members’ behaviors is critical for GameStop’s entire business. Mike’s presentation was a clear reminder that loyalty programs in and of themselves are not enough to retain customers.
Mike’s presentation hit the nail on the head. Based on Fulfilling the Relevancy Promise, a May 2016 commissioned study, conducted by Forrester Consulting, on behalf of VeraCentra, basic approaches to loyalty continue to prevail over the advanced methods necessary to deeply engage customers.
Download the full study here.
So what’s getting in the way of marketers being able to up their game when it comes to customer loyalty? From my vantage point, a critical component to understanding customer behavior and being able to deliver on advanced tactics is… more granular data. Then, and only then, can we deliver the relevancy consumers demand. And, despite the big data tools available to help us, data hurdles continue to plague us.
Granularity, the Key to Delivering Relevancy
As many brands find out, getting the level of granularity needed to uncover real and actionable customer insights is a bigger challenge than most in-house teams can manage.
How to get beyond and solve this challenge was the focus of another CRMC presentation, given by one of our clients, Jose Luis Marin, Senior Vice President of Marketing for PriceSmart. For those of you, who do not know PriceSmart, picture a “Costco” in the Caribbean, Central or South America. With over $3 billion in revenue and 2.8 million cardholders, across 38 warehouse clubs, in 12 countries, and one U.S. territory, PriceSmart has a substantial and complex customer membership base.
During his presentation, Jose Luis Marin confirmed, “Central to obtaining meaningful value is scaling down customer data to a granular level. Granularity, not generalities, is needed for marketing to understand, and act upon, specific customer behaviors. Without this level of granularity, Marketing is left to fly blind — a significant risk for a membership organization like PriceSmart.”
Jose Luis Marin went on to describe two major issues within PriceSmart:
- The regional marketers were unable to access the customer data they needed, quickly and efficiently. Like many organizations, marketing relies on the internal Business Intelligence team to produce insights from available data. Oftentimes a request will take weeks to turn around. But when customer membership renewals are at risk waiting weeks for data and insight just doesn’t cut it.
- The regional marketers were unable to interpret member behavior data with enough granularity to take relevant action. Relevant and personalized communications to members were needed to engage them and to promote the benefits of renewal. For a brand that relies on membership for much of its profit, “Membership is the only SKU delivering 100% profit”, the criticality of membership renewal cannot be underestimated.
The marketers at PriceSmart are not alone. The May 2016 Forrester commissioned study, Fulfilling the Relevancy Promise, available for download here, highlighted that 37% of marketers are challenged because they either have a poor ability to interpret data for customer insights or lack access to relevant data entirely.
Overcoming Data Hurdles
When PriceSmart engaged VeraCentra we studied the data nuances within the PriceSmart complex ecosystem. It was our job to effectively correlate the various data points to create meaningful member insight for both the Finance and Marketing teams.
To support fast access to insight and relevant granular data a centralized data mart was put in place. With complex geographic diversity, and the need to uniquely market across 13 different countries, the solution also included VeraCentra’s Intelligence Platform (VIP). This web based enablement tool put member data and insight directly in the hands of each regional marketer, who in turn executed relevant communications to members.
Granular Data Makes a 10X Impact
“Today, at PriceSmart, we no longer fly blind. We have the insight we need to confidently develop strategies and execute highly relevant communications that are 10 times more effective” stated Jose Luis Marin. As membership renewal rates continue to climb, more member visits and increased spend per visit are driving revenue and profit growth for PriceSmart.
Download the full PriceSmart Success Story here.
Moving beyond standardized loyalty practices of yesterday, that are increasingly becoming blunt tools, will require us to employ more advanced personalized methods to engage customers and meet their relevancy expectations. And that means accessing, interpreting and using more granular customer data. It’s clear granular use of data makes a difference when it comes to increasing customer loyalty… a difference that makes a difference when looking to sustain the long term health of your brand and business.
About the Author:
Connie is passionate about customer relationship strategy and truly understands consumer behavior. An executive level advisor for some of the world’s most prestigious brands, Connie has a track record of delivering game changing customer strategy alongside significant bottom line results. Through the years, companies such as GE Capital, Intuit Software, and Costco Wholesale have sought Connie’s expertise. Connie is President and Founder of VeraCentra, a Customer Relationship Agency.
VeraCentra’s Closed Loop Solution is an integrated approach that brings together relationship strategy and data scientist teams to overcome technology and data challenges to help yield actionable customer insights. And our Journey design services coupled with our digital platform integration team work in parallel to advance action, creating and automating customer messages. Our Closed Loop Solution is fully integrated, allowing you to realize a quick return on your customer relationship marketing investment.